Now, more than ever before is the time to reduce needless spending and save as much money as possible. This is because of the current and likely post-effects of the COVID-19 pandemic.
Already, the global economy has entered a recession and the International Monetary Fund recently predicted that the world economy would enter a deeper recession in the coming months.
Even when the world has not entered a deeper recession, many companies have shut down, millions lost their jobs, wages and salaries reduced by as much as 70 per cent, and many workers told to embark on unpaid leave.
Certainly, these are not the best of times for most people around the world. With the COVID-19 pandemic still ravaging the world and no cure yet for the virus, the times ahead may be tougher.
This is certainly not to scare us but to prepare everyone for the challenges ahead, especially for financial issues.
From cutting down on energy consumption, minimising food waste, to unsubscribing from unnecessary services, the following are 15 tips to save money at home.
Even when the economy improves again, the tips can help you reduce expenses and grow income.
Choose quality over quantity
Some people tend to choose quantity over quality, but this is a bad financial decision, according to the founder and CEO of Financially Wise, Inc in Los Angeles, the United States, Ms Brittney Castro.
She noted that quality products might be more expensive than inferior ones. But in the long run, quality products usually helped to save more money than inferior ones.
“This can apply to food, clothes, electronics, and much more. Although it is tempting to choose the more budget-friendly version of an item, sometimes choosing quality over quantity will save you more in the long run. Save up your money and get the best-quality product you can afford, and leverage the cost-per-wear philosophy with more expensive clothing and shoes.
“This applies to food, too: Buying quality organic food can nourish you in ways that fill you up more than the prepackaged, processed stuff and potentially save you money on health care expenses in the future. Find a balance that is right for you and choose quality whenever you can,” Castro wrote on cnbc.com.
Make your coffee at home
This may not be good news for people who love going to coffee shops to drink delicious organic coffee. However, spending a whopping amount on coffee every day definitely adds up to your expenses.
So try a new approach by buying coffee at a store or café nearby, and make it at home. For example, a jar of coffee costs as low as N2,000 at the store and you may consume this within at least two weeks, depending on how much you consume coffee. Now, compare the costs of making your own coffee and buying at a coffee shop every day.
Wait 48 hours before you click “buy”
Warning against impulsive buying, Castro said,
“Since we can have anything we want these days with just the click of a button (there’s that instant gratification again), we need to find a system to help buffer your impulse purchases.
“For example, wait 48 hours before spending money on things that cost more than a certain amount. When you do, you will find that most of the time, the item was more of a want than a need. Plus, you will save money and work towards being more mindful of your spending.”
Create homemade gifts
Find creative ways to express your love to friends and family members with free, lower-cost, or handmade birthday and holiday gifts.
After all, a handwritten note explaining why you love someone can be more sentimental than some expensive gift he or she may never even use.
“Most people will appreciate the thought behind your gifts more than anything, so don’t be afraid to save money and find free ways to celebrate birthdays and holidays,” said Castro.
Start a garden
CNET writer, David Priest, recommended starting a garden to save money on certain food items. He said,
“If you have a backyard, you can avoid many of the upfront costs of a raised bed and simply get seeds to plant in the ground. You can get some seeds that will translate into much food over the following months.
“Building a garden can be hard and expensive if you’re starting from scratch. But if you start tossing your food waste into a compost bin now, you won’t have to buy tons of fertiliser or expensive soil for your garden next year. Plus, composting is another good way to help the environment.”
Cancel automatic subscriptions, memberships
Chances are, you’re paying for multiple subscriptions on gym memberships and trendy subscription boxes, Amazon Prime, and even mobile data. It’s time to cancel any subscriptions you don’t use on a regular basis. And make sure that you turn off “auto-renew” when you make a purchase. If you cancel it and decide you can’t go without it, subscribe again, but only if it fits into your new (and improved) budget.
“Consider membership sharing with some family or friends on the subscriptions you do want to keep around. Many streaming services, like Netflix and Hulu let you watch your favourite shows from two or more screens (with an upgraded account). That way, everyone wins, and saves!” financial expert Dave Ramsey wrote on daveramsey.com.
Get rid of debt
An investment analyst in Lagos, Mr Kola Oni, stated that monthly debt payments were the biggest obstacle to saving money. “Debt robs you of not just your income, but also your peace,” he said, advising that it was time one avoided debt. He said,
“Debt prevents anyone to save money, and one thing about debt is that if you don’t tackle it on time, it grows and prevents one from making financial plans for the future.
“The fastest way to pay off debt is with the debt snowball method. This is where you pay off your debts in order from the smallest to largest. This is not easy, though; it’s about discipline. Once your income is freed up, you can finally use it to make progress towards your savings and investment goals.”
Save money no matter the situation
A financial expert based in Abuja, Mrs Peace Hassan, said in spite of debt or pressure from family and friends, one should always save at least 10 per cent of wage or salary. She said,
“This requires a great deal of financial discipline but when the fruits start showing, it brings joy. One should always endeavour to save at least 10 per cent of personal income. For instance, if you earn N100,000 per month, try to save at least N10,000.
If possible, save N20,000. At the end of the year, you have N120,000 or N240,000 in savings. You can use this for a business or investment and make more money, or you can keep saving towards a particular goal, maybe to buy a house or land.
“Why many people don’t save is that once they receive their salary, it is hard to deduct anything from it because expenses are already waiting. To solve this problem, you can set up your bank account to automatically transfer funds from your checking account into a savings account every month. You can also set up your direct deposit to automatically transfer 10 per cent of each paycheque into your savings account.”
Reduce energy costs
Did you know that you can save money on your energy bill just by making a few tweaks to your home? Start with some simple things like taking shorter hot showers, fixing leaky pipes, washing your clothes in cold tap water, and installing dimmer switches and LED lightbulbs.
“While new, energy-efficient appliances are a great way to save money on your energy bill, they’re expensive! But if you work it into your monthly budget, you can pay cash for those small improvements,” Ramsey said.
Eat at home, take food to work
Hassan said buying food a few times a week might seem harmless in the moment, (especially when one’s favourite restaurant was a walking distance from one’s office), but one could save some money by eating before leaving the house and taking food to work. She said,
“It’s not bad to buy food outside but it should be once in a while. Eating food at home before leaving for work and then taking food to work can save a lot of money. For instance, some people buy a meal worth at least N1,000 at the restaurant per day. This translates to about N30,000 in the month. If one is spending that much on meal alone, what about other expenses?
“Unfortunately, some of the foods usually bought outside are not properly cooked; this can cause sickness and health expenses in the long run. I believe homemade food is the best. Not only that, you can also often purchase a week’s worth of groceries for the same price as two meals that you purchase outside. So prepare your food at home and watch your savings pile up, month by month.”
Spend extra or unexpected income wisely
Ramsey advised that if you got a bonus at work or other extra income, put it to good use. “If you’ve still got debt, you’ll be better off using those funds to pay it off, and if you’re debt-free, use the extra money to build up your emergency fund,” he said.
Borrow rather than buy
Also, another way to save money is to borrow rather than buy certain items.
“For instance, need a tree trimmer for some weekend yard work or a handheld blender to make a batch of soup? Borrow it from a friend or neighbour instead of taking a trip to the store,” Ramsey advised.
Try a ‘staycation’
When your goal is to save money, a vacation is the worst thing you could spend your money on. Instead of whisking your family off to the Greek Isles, try being a tourist in your own city. Not only will this save you money, you can also explore your neighbourhood with fresh eyes and have some fun while doing it.
Sell things you don’t need
A financial expert based in the US, Marie Kondo, advised getting rid of things you don’t use in your home, or you’re willing to let go for the sake of your financial future.
“That chair you don’t use? Sell it. That crystal vase you found at an antique shop but hardly use? Sell it. You’d be surprised at how much clutter you have in your home that you don’t even use or think about. And the cash you can make on those things can be the difference between living paycheque to paycheque and having a fully-funded emergency fund,” she said.
Read a personal finance book
Castro said learning about personal finance could expose one to more strategies to help save money for one’s goals. “Knowledge is power, and the more you know, the more you can save,” she said.
She also advised working harder and smarter and explore other income sources.